£17m lifeline for stricken sub-prime lender
Morses Club, the stricken sub-prime lender based in Nottingham, has received a £17m funding lifeline.
The company says its funding consortium has agreed to extend its existing facility, with a revised £12m limit for a period of 12 months, ending on 31 March 2024. The funders have agreed to a quarterly term-out option.
Morses Club has has secured a 12-month mezzanine finance facility of up to £5m from its largest shareholder, Hay Wain Group.
The facility is flexible in how it can be utilised, says the company.
Last month, Morses Club begun the process of inviting customers to vote on its Scheme of Arrangement proposals after admitting it has received “an increased volume of complaints.”
The troubled sub-prime lender will launch a compensation fund of “at least” £20m which will be shared between creditors with valid claims if the arrangement goes ahead.
The Nottingham-based company appeared in court in March after the FCA said there was “considerable uncertainty” surrounding its ability to secure the funds it needs to compensate claimants.
Last year, the firm suspended processing claims made against its “unaffordable” loans and issued repeated warnings that it could enter insolvency unless it brought forward a Scheme of Arrangement.
In February, shareholders voted to de-list the company from the London Stock Exchange in a bid to avert what looked like its imminent collapse.